The traditional “Golden September” is usually perceived as the peak season in Guangzhou’s property market, but this year there has been a significant drop in both city-wide and region-wide turnovers. Zengcheng, Nansha and Panyu were among the regional districts with top ranking transactions during the Mid-Autumn Festival. However, only 44 units were sold online in Zengcheng, compared to 186 units in 2013. The second highest was Nansha,of which 38 units were sold this year. Meanwhile, the third highest was Panyu, which recorded a low number of 30 transactions compared to the number of 79 units a year ago. The currently active new property projects include “Zhong Xin Xi Guan Hai” in Liwan District and “Xing He Shan Hai Wan” and “Li Fu Hu Pan” in Guangzhou.
On the other hand, the average transaction price within the same period came close to 30%, which was probably due to Guangzhou government’s gradual liberalisation with high-priced online transactions, the fact that the city has not uplifted its home purchase restrictions and due to the fact that most of the developers in Guangzhou do not accept loans out of retirement funds. Market sources indicate that some buyers have already switched to Foshan, a nearby city for home purchases.
Despite the apparent weak market sentiment, we still hold an optimistic view to the upcoming “Silver October” season. Most developers are expected to accelerate their property project launches due to the pressure of hitting their annual sales targets. Therefore, market supply will likely reach a new high in the remainder of the year 2014 and will be dominated by end-users housing products. For property projects located in the countryside, developers could offer more sweet deals to attract a higher number of potential buyers. Near-term housing price in core districts will remain stable, tracking a gradual digestion in high-end residential projects, whilst a stable transaction growth in primary residential market is also likely to be seen in the coming month.